4 Value Stocks for Superior Returns in 2023

While up by at least 6% month over month, these four value stocks can still be excellent assets to buy right now for superior returns this year.

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The past month has seen a sudden uptick in the S&P/TSX Composite Index. As of this writing, the Canadian benchmark index is up by 4.72% from the same point a month ago. This can start an upward trend lasting for at least several weeks, if not months, or it might just be a momentary bit of respite for the market.

Whether or not the market sustains this momentum, it gives value-seeking investors a good snapshot of a few names that could be undervalued stocks that could deliver good returns during favourable market environments.

Today, I will discuss four stocks you can consider adding to your investment portfolio if you want to identify undervalued stocks for this purpose.

Lundin Mining

A $7.15 billion market capitalization metals and mining company, Toronto-based Lundin Mining (TSX:LUN) stock could be a good investment to consider. At $9.25 per share at writing, Lundin Mining stock trades at a 10.76 price-to-earnings ratio and 1.21 price-to-book ratio. The mining company operates several mines across Sweden, Chile, Portugal, Brazil, and the U.S., producing several base metals.

If you want to invest in the mining industry without gold exposure, Lundin can be a great bet. The company offers a diversified exposure across copper, silver, zinc, nickel, and other metals, generating significant revenue. At current levels, it offers a 3.89% dividend yield that you can lock in right now.

Quebecor

Quebecor (TSX:QBR.B) is an excellent stock to consider if you want to gain exposure to a smaller company in the Canadian telecom space. While the media and telecom spaces have two or three major names with the biggest market share, this Montreal-based, $7.33 billion market capitalization is not a minnow.

After expanding to the Canadian west coast, it is on target to become Canada’s fourth-largest player in the telecom industry, and it is not a stock to sleep on.

As of this writing, it trades for $31.58 per share, translating to a 12.61 price-to-earnings and 5.38 price-to-book ratio. Down by just 3.48% from its 52-week high, its share prices have shot up by 32.30% since October 14, 2022. It can undoubtedly have a place among undervalued stocks you can consider adding to your portfolio.

Cameco

Renewable energy is the energy industry’s future, and Cameco (TSX:CCO) is a stock you can consider to gain exposure to one segment of it. Nuclear energy, when fully mastered, can provide virtually endless clean energy.

Uranium is a critical element to unlocking that energy, and this $14.80 billion market capitalization firm is the world’s largest publicly traded uranium company. Headquartered in Saskatoon, Saskatchewan, Cameco might become a leading presence in the energy industry due to its capacity to produce uranium.

As of this writing, it trades for $34.13 per share, translating to a 118.07 price-to-earnings and 3.03 price-to-book ratio. While it means that the stock is not technically undervalued right now, its immense growth potential makes it arguably so. The global push for uranium will only intensify in the coming years, and Cameco stock will be an excellent way to capitalize on the demand.

Barrick Gold

Barrick Gold (TSX:ABX) is a familiar name to many. Gold and gold stocks tend to benefit from market volatility whenever a recession looms overhead.

As the world’s largest gold producer, this $46.35 billion market capitalization might be overdue for its day in the sun, and it seems to be shining brightly on Barrick Gold right now. As of this writing, it trades for $26.30 per share, up by 12.66% in the last month.

At current levels, it trades for an 18.08 price-to-earnings and 1.43 price-to-book ratio, making it undervalued. The gold stock will benefit from rising gold prices, and it can comfortably fund its dividend payouts. As of this writing, it pays its shareholders at a 2.07% dividend yield that you can lock in by adding its shares to your portfolio right now.

Foolish takeaway

When allocating your money to any stock, understand that it’s necessary to be careful with how much you invest. Stock market investing is especially risky during volatile market environments. Considering the overarching situation, all four stocks appear undervalued and poised to deliver stellar growth. However, the returns are not a guarantee, regardless of how safe a stock might seem.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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